Friday, March 18, 2011

The Real Question to Ask About the Ratner Bait-and-Switch Approach on Atlantic Yards

In the lightning-keeps-striking department, state officials over at ESDC* appear to have been embarrassingly stung by yet one more bait-and-switch by Atlantic Yards developer Bruce Ratner with his just-announced intention to convert the now erstwhile premium design he once promised for his Atlantic Yards mega-monopoly to a mere assembly of prefab modular units. Ratner would thereby be bestowing upon Brooklyn the world's tallest prefab building (with untested technology) and what is projected to be the densest 22-acres of residential units in North America would then become a super-tall forest of cheap prefabs.

(* the “New York State Urban Development Corporation” doing business as the “Empire State Development Corporation)

A List of Ratner Atlantic Yards Bait-and-Switches (incomplete)

This most recent episode means that an incomplete list of the bait-and-switches that have been `foisted’ upon the ESDC to date now includes the following:

2. The revamping of the basketball arena Gehry design to an airplane hanger design dressed up with a theoretically temporary metal lattice work wreath. That arena is also smaller than promised and apparently can’t accommodate a hockey team, not that the surrounding Brooklyn Brownstone community should actually be happy if it could.

3. A shift from a swift 10-year build-out of the megadevelopment to a schedule that (like the now 40-plus-year development of Roosevelt Island) will take the protraction of “decades” to complete.

4. Constructing, in return for the MTA’s contribution of land, a significantly downscaled train yard with 7 tracks rather than 9 or the original 10, which reduced and minimized train yard will not provide the MTA with the flexibility it needs for long-term plans.

6. A substantially lower, in fact pathetically paltry, purchase price for public land paid out over time and at the developer’s option rather than upfront. The developer also gets an artificially low interest rate courtesy of the taxpayers puts down just 20% to start and doesn't having to pay the bulk of the already discounted price the government had previously accepted, a remaining $80 million, until 2031.

Incompleteness of the List

The list above is incomplete not only because it is virtually impossible to remember well enough to enumerate every single alteration of this project for the benefit of the developer at the expense of the public, but also because there are undoubtedly more bait-and-switches in store for us. Further, as ESDC often keeps bait-and-switches under wraps, there may actually be more in place at this moment.

ESDC kept the switch from a 10-year build-out to a multi-decade build-out secret, including by its calculated decision not to give pertinent documents to Judge Marcy Friedman in the current ongoing litigation respecting the consequent inadequacy of the environmental impact reviews. Similarly, ESDC kept under wraps the substitution of the ethically questionable Russian oligarch Mikhail Prokhorov for the usual good-old-familiar American investors . . . . even if those good-old investors come as crooked as Ratner. Let’s add that Prokhorov substitution to our growing, but still incomplete, list:

Beyond numerous other giveaways, like gifting the renaming rights of two major New York City subway station hubs for the developer to sell, we can probably also toss into this stew the way that New York State public officials have abased themselves by shilling for various developer tactics designed to divert more of the public’s tax dollars, including lobbying for the granting of a special IRS loophole's continuance to finance the arena and the use of EB5 sale of green cards to the Chinese via a program theoretically intended to increase jobs in the United States even while the developer, through maneuvers like this shifting to cheap modular construction, is hacking away at the already fictional number of jobs the project once promised. We could easily include such public official abasements for the developer’s sake but perhaps the willingness of ESDC officials to abase themselves this way is just something inherently in these officials’ DNA. . . they just naturally give things away for free.

Ratner’s Preintention When It Comes to Bait-and-Switch

I am not surprised that the first thing a friend asked me upon hearing of this latest bait-and-switch was: “Do you think that Ratner intended this all along?” Whether Ratner intended this particular bait-and-switch all along is not the question. What is important, as we have pointed out before, is that ESDC worked from the beginning to put the Forest City Ratner organization in the driver's seat, giving it, without bid, exclusive rights to this megadevelopment in such a way that Ratner could always shortchange and blackmail the public with frequent bait-and-switches thereafter. This setup for bait-and-switches was certainly intended by Ratner and consciously facilitated by ESDC officials from the get-go. So whether or not Ratner intended this particular bait-and-switch is not important: He intended a framework in which he could pull off this bait-and-switch or any other bait-and-switch he could think of.

Is Ratner really intending to carry out this most recently proposed bait-and-switch or is it just blackmail to get the state and city to give him more money? Does it make a difference? The result is the same; the public has been gypped. And thank you very much ESDC; this comes courtesy of you.

Ratner and the Construction Unions

Is it possible that Ratner is a man who can say something reassuring to your face even while intending exactly the opposite? If there was any doubt, this bait-and-switch addresses that question. Yes he can. From a Noticing New York viewpoint it is possible to have some sympathy for unions some of the time (see, Monday, February 28, 2011, Private Sector Croynism Seeks to Replace Government in Wisconsin: Might New York Be Leading the Way?), but when it comes to the construction unions supporting Atlantic Yards and other mega-schemes in New York like the rezoning of Coney Island little sympathy should be extended to them.

Construction unions are interested in the churn. They are not interested in what is in the public interest (hence their partnering with Ratner). Frank Lloyd Wright once facetiously proposed that all of Manhattan be leveled and replaced by just two phenomenally enormous tall towers. I often think that if such a plan were proposed today the construction unions would be out in droves to support it, not because it was in the public interest but because it would mean a huge amount of union jobs, both demolition and construction.

On March 17, 2011 (St. Patrick’s Day), the front page New York Times story that informed us that Ratner was shafting the unions by going with modular construction also informed us that, “Mr. Ratner’s development company, Forest City Ratner, has been investigating modular construction for a year, but has kept its plans secret.” For a year!

That sounds like two things were going on simultaneously, Ratner was praising the unions as his allies and secretly planning to shaft them.

Where Now and Who's Watching?

Where do we go from here? The state ESDC is now owned lock, stock and barrel by Andrew Cuomo now that he is governor. Everything that happens from here on in, every future bait-and-switch, is on his watch. If Cuomo wants to prove that the money he accepted from Forest City Ratner during his campaign for office didn’t mean anything he should terminate the project and take the land back from Ratner now. Similarly, Eric Schneiderman, our new New York State Attorney General who promised to investigate abuses of eminent domain like Atlantic Yards but took $12,500 from Forest City Ratner for his campaign should get busy investigating as he promised. With the Ratner organization being implicated in paying off public officials with respect to two of its biggest projects in both Brooklyn and Yonkers, he has plenty to investigate.

Note that both Mr. Cuomo and Mr. Schneiderman should have a freer hand to act (without sacrificing any significant political capital) now that the Ratner plan to shaft the unions has seen the light of day. One thing that taking the project from Ratner and bidding it out to multiple developers (as at Battery Park City) could do is bring those jobs back into play and, with multiple developers. . . And the work would likely materialize far sooner.

How Could Cuomo Give Ratner the Boot?

One simple, efficacious way for Cuomo to send Ratner packing would be to simple settle the current environmental lawsuit before Judge Marcy Friedman in favor of the myriad community plaintiff organizations that joined together to bring it. In fact, looking at this switch to modular prefab, Atlantic Yards Report has just added one more reason why that lawsuit should be settled in the plaintiffs’ favor: See, Thursday, March 17, 2011, Does modular construction mean a new environmental review is needed for Atlantic Yards? Settling in the plaintiffs’ favor would give us all one dead Ratner project. It would also mean an end to the current structure that locks the state and city into being the victim of a constant round of bait-and-switch operations throughout the foreseeable decades. Your move, Governor Cuomo.

About Me

NOTICING NEW YORK & NATIONAL NOTICE are both independent entities managed by Michael D. D. White of Hop-Skip Enterprises. Michael D. D. White is an attorney, urban planner and former government public finance and development official. *** Noticing New York covers New York development and associated politics. National Notice covers national policy and economic issues *** Contact: MichaelDDWhite(at)gmail.com